The proposed merger of Publicis Groupe and Omnicom to create the biggest ad giant the industry's ever seen threatens the fate of one of the most coveted honors given out every summer in the South of France: the holding company of the year award.
Issues of unfair advantage have surrounded the honor since the Cannes Lions International Festival of Creativity created it three years ago. But the creation of this new behemoth ad group is likely to force festival organizers to either scrap the award or drastically rethink how it will be tabulated going forward.
The award is meant to recognize the most creatively celebrated ad conglomerate of the festival, via the number and prestige of Cannes Lions it earns in a given year.
Back in 2011, when the festival announced it was adding this honor to its regularly expanding lineup, Cannes CEO Philip Thomas told Ad Age that organizers instituted the award not because holding companies asked for it, but as a way to standardize the results, given the companies' tendency to do creative math when tallying the results. "The issue is that holding companies were adding up the points in their own ways, so all the different holding companies were announcing how they did in Cannes, but there was no consistency," he said. "We will add up the points using our own system and that will be the official position."
Since Cannes began doling out the award, WPP has swept the title. In 2013, WPP earned 2,067 points, followed by Omnicom, which earned 1,552 and Publicis with 989.5. But, if Publicis Omnicom had existed as of this year, its total points would be 2,541.5 -- blowing the competition straight out of the water. The previous year would see a similar outcome. In 2012, WPP earned 1,554.5 points, Omnicom had 1,375.5 and Publicis 1,032. Here, as well, a combined score of the latter two (2,407.5) would push it much further above WPP's total, giving the new holding company what seems an unfair advantage over the competition, by virtue of power in numbers.
The award tallies all the Lion wins and shortlist honors earned by a holding company, counting awards earned by agencies for which the holding company has at least 20% ownership. Points earned are on a sliding scale, depending on the level of award, moving upwards from shortlisted to Grand Prix.
Under the current system, WPP's chance of winning again are highly unlikely. Provided the Publicis Omnicom merger is approved, WPP will be supplanted as the largest holding company and move to the No. 2 spot.
"Cannes should just be about creativity," said John O'Keefe, who's been worldwide creative director at WPP since 2008. "My actual position is that we don't set out to beat OMC or Publicis or anyone else at Cannes. We set out to give our clients the best -- and generally that means 'most creative' -- solutions to their briefs. If that then means that the work our agencies do cumulatively makes us the most creative holding company, that's simply welcome recognition of the efforts of all of our people. But merely a happy accident: a nice by-product of what our day to day job actually is."
Mr. O'Keefe did not address whether WPP plans to appeal to Cannes festival organizers to eradicate the award or find a new more equitable formula to arrive at a winner.
According to people familiar with the matter, Interpublic Group of Cos. -- even before the megamerger -- had flagged to festival organizers that size creates an unfair advantage with the holding company of the year award. Execs say Interpublic argued that as the award is based purely on the volume of entries, it results in a competition that's limited to the two largest holding companies (which prior to the mega merger was WPP and Omnicom) and thus meaningless to the industry as a whole. IPG has argued for a pro-rated formula to be developed, adjusted based on number of employees or revenue vs. the number of Lions won. Interpublic declined to comment on the matter, but surely the merger of Publicis and Omnicom will only further its desire to see the award go away or be altered.
Cannes CEO Philip Thomas and Chairman Terry Savage were unavailable for comment, a festival spokesperson said.
The merger's impact on awards is likely to spread beyond Cannes. Another one of the industry's most prestigious shows, the Effies, which celebrates the most effective work, also instituted its own Holding Company of the Year award three years ago.
In 2013 and 2012 that title went to WPP. Omnicom took the inaugural honor in 2011. The Effies organization has been considering the implications of the merger on the award, but hasn't yet decided what it will do. "We have the time to make a considered decision, and the Effie Worldwide board plans to take advantage of that time," said Mary Lee Keane, president of Effie Worldwide.